I actually watched a good bit of the replay of yesterday's incredible House hearings with Madoff scandal whistleblower Harry Markopolos and the SEC (yes, it was a rockin' Wednesday night), and they really are amazing. The extent to which government protects the rich and powerful was really on full display. Here are two clips that should be widely distributed.
We now know that Bernie Madoff was running a Ponzi scheme that defrauded investors out of tens of billions of dollars. We know that the SEC had everything it needed to stop the fraud years in advance and did nothing. And yet today, Bernie Madoff is still living in a fabulous New York penthouse instead of a jail cell, with a security detail that he pays for. As Markopolos says in this clip, "He's under penthouse arrest [...] He is leading a life of luxury. He does have serious complaints; he's not allowed to go out for his nosh."
More amazing altogether is the behavior of the SEC officials, who actually tried to assert executive privilege in refusing to discuss their failure in the Madoff case or of any resposible oversight of the financial industry at all.
Go Gary Ackerman. I think we've become so inured to random government officials using "executive privilege" as a get out of jail free card that we don't understand how extraordinary this is. We pay the salaries of these people. Every one of them should be fired.
Meanwhile, Emperor Paulson stole your money in the bailout.
The U.S. Treasury may have significantly overpaid for its investments in financial institutions, a government watchdog said Thursday, as criticism of the $700 billion financial rescue continues to build.
"Treasury paid substantially more for the assets it purchased under the [ Troubled Asset Relief Program] than their then-current market value," Harvard Law School professor Elizabeth Warren told the U.S. Senate Banking Committee.
Warren, who chairs a five-person congressional oversight panel overseeing the Wall Street rescue plan, said a report being released Friday by the group includes an analysis of 10 TARP transactions. Extrapolating that analysis for all of the purchases made by the Treasury in 2008 suggests Treasury paid $254 billion for assets worth approximately $176 billion, a shortfall of $78 billion.
"They did not price for risk, that's what markets do," Warren said, suggesting the Treasury's lack of consistency had made the government funds a better deal for some institutions.
And they're getting ready, under "new leadership" at Treasury in name only, to do it again. More on that in a different post.
It's a wonder that pitchfork and torch sales aren't through the roof.